Workday’s Latest AI Announcements: What You Need to Know Before Entering the Negotiation Room

During its recent earnings call, Workday unveiled a suite of new AI features and capabilities purported to deliver business process enhancements and intelligence across its HCM and finance applications. From generative AI to automation-ready agents, the message is clear: Workday is investing heavily in AI, and it expects its customers to buy into that vision.

If you’ve considered Workday’s AI capabilities as a new Workday customer or as part of expanding your current Workday footprint, you should approach these announcements with a clear understanding of what’s real, what’s roadmap, and how you should think about your negotiation strategy.

What Is Workday Illuminate and Why Should You Care?

Illuminate is Workday’s new AI foundation announced in Sept 2024, and it serves as the underlying AI platform for all Workday products and services. Since Workday was designed natively in the cloud, in what you could call the “big data age,” Workday can claim their proprietary data environment is clean and potentially more ready for AI application than legacy software providers that have had to adapt to the cloud.

If we grant them this fact, Workday is in a good position to cash in on their new AI capabilities ranging from natural-language interactions, business process automation, and decision support across its suite. Here are some specific examples of what was highlighted:

• AI Agents designed to automate tasks and business processes across payroll, contracts, internal audits, and other functions. These are prebuilt by Workday, some of which are available today, with others rolling out this year and next.
• Agent System of Record (ASR) provides centralization and manual oversight for the AI Agents above, as well as 3^rd party agents. As businesses adopt agentic AI, Workday or otherwise, the ability to effectively manage them will be necessary for adhering to internal AI guidelines, tracking their business impact, and understanding ongoing costs.
• AI Gateway grants access to Illuminate via Workday Extend, hence the “gateway” name. As a reminder, Workday Extend (updated from Workday Cloud Platform) was released in 2020 and is a developer environment that gives customers the opportunity to build apps and tools on the Workday platform. AI Gateway is an enhancement to Extend, giving customers and Workday-approved partners access to Workday’s AI and Machine Learning (ML) capabilities to assist with their development work.
• Developer Co-Pilot, available through Workday Extend Professional, offers low-code or no-code capabilities for building applications in the Extend environment.
• AI Marketplace holds several AI applications built by Workday or certified 3^rd parties that customers can purchase and deploy. While the AI Marketplace is a couple of years old, more and more applications have been made available in recent months. You can expect its growth to continue.

Key AI Features That May Surface in Your Negotiation

Many of the new capabilities Workday is promoting, like Document Intelligence, AI Forecasting, and Intelligent Answers, will soon appear as value drivers in your sales conversations, if they haven’t already. With that expectation in mind, here’s a few questions you should consider:

• Are these features part of the base subscription or add-ons? Some capabilities may be bundled with advanced SKUs or priced as standalone products. It’s difficult to delineate products and capabilities from Workday’s website, and it is necessary to push Workday to help you understand product nuances – the devil is in the details, as they say.
• Is the functionality production-ready or still under development? As it would apply to any cutting-edge technology, Workday should share references of other customers benefitting from their AI features. This is especially true for existing customers, who through Workday’s annual subscription fee increases, identified as an “Innovation Index,” have been funding Workday’s R&D since subscribing.
• What features or tools (like AI Agents or Developer Copilot) will you realistically use? Workday’s new products and capabilities may be impressive on paper, but not all customers need or can take advantage of them. It’s critical that customers interested in Workday AI tools put the onus on their account team to showcase them in customer-relevant use cases rather than just perfect-world environments.

Bottom Line: AI Is a Sales Lever

Workday is not just launching an AI platform. It’s launching a new value narrative it will bring into every sales cycle. As a prospective customer, you must:

• Pressure-test what’s included in your deal and be confident you’re buying what’s necessary to meet your requirements, not Workday’s.
• Understand the deployment readiness of the features being showcased, as well as your ability to adopt them.
• Negotiate commercial protections while you have the leverage. Workday wants and needs customers to adopt their new technologies, and you can use that to your advantage.

UpperEdge is helping clients navigate exactly these kinds of shifts in vendor strategy. If Workday is on your roadmap, we can help you separate AI fact from fiction and ensure you negotiate a deal that aligns with your real needs, not just their AI vision. Explore our Workday Advisory Services to learn more.